Eleco LON:ELCO the AIM-listed, London-based specialist international provider of software and related information technology services published its final results to the end-December 2023 today (23rd April).
It’s been a busy year for the software specialist. Earlier this month Eleco acquired the Vertical Digital Group, for GBP1.1m, a software developer and IT consultancy that Eleco said will complement its own products and client list and has a roster of international clients including, Lufthansa Technik, PwC, VW Financial Services, Deloitte and Zoopla.
Accelerating ability to support digital transformation strategies
Jonathan Hunter, Eleco’s CEO said at the time: “”We are pleased to welcome Vertical Digital to the group, which will accelerate our ability to support our customers in solving the challenges they are facing in delivering their digital transformation strategies. Eleco is now better positioned to provide a broader range of solutions and engage with more of its customers and partners on their strategic technological direction.”
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The board has also seen changes with James Pellatt, a digital transformation specialist formerly of Great Portland Estates LON:GPE, joining as NED last month and Alyson Levett, a chartered accountant with a background in software, telecoms and consumer services also joining as a non-executive director in December.
The company reported a 24% uptick in annualised recurring revenues (ARR) compared to last year to GBP22.6m, with total recurring revenues up to GBP20.7m, a 22% increase year-on-year. This led to headline total reported revenue of GBP28m, an increase of 5% y-o-y.
Profits, earnings and revenues up for Eleco
Eleco’s margins are running at 89.91%, improving by 143bps y-o-y, with earnings of GBP5.8m, up 12% on 2022. Increased earnings and increased margins have led to adjusted profit before taxation of GBP4.2m up 17% y-o-y and adjusted profit after taxation of GBP3.3m. Adjusted basic earnings per share was 4p, up from 3,6p in 2022 and Eleco declared a final dividend of 0.55p a share, a 10% increase y-o-y.
Despite the acquisition of Vertical Digital, Eleco’s cash balance remained healthy at GBP10.9m at the calendar year end and the company is debt-free.
With a bit of money in the bank and strong revenue generation, Eleco is scanning the market for other accretive deals. Hunter said: “Our commitment to growth, both organically and through acquisitions, remains firm. We continue to seek acquisitions that augment our customer base, complement our technological arsenal, expand our geographic footprint, and advance our SaaS platform.”
Eleco’s share price has responded positively. Opening the day at 98.8p the Eleco share price jumped to 99.94p when the results dropped, settling back to around 98.5p as the morning’s trading unwound. Over the year-to-date the Eleco share price put on 18.3% while over one-year were up 25%. The company’s shares ranged between 72p and 101.75p over a 52-week period, and Eleco’s current market capitalization is GBP79.8m.
Eleco founded in 1895
Eleco, although now in the tech sector, can trace its roots back to 1895, when it was founded as the Gibert Arc Light Company in Chingford, Essex and in the first part of the twentieth century diversified into electric lighting equipment, renaming itself as the Engineering and Lighting Company (ELECO), listing on the London Stock Exchange as far back as 1939. The company has been in the software business for 22-years and went all-in on software in 2013, selling its associated building systems and precast concrete businesses to focus on software as a service to the corporate market with 17 representative offices globally.
The company’s latest results consolidates strong financial growth, and a favourable outlook into 2025 and beyond.
